No it isn't, you can also alter the tax code or take advantage of built-in loopholes. 2/3 of US corporations pay no income tax at all. And then there are also the various ways people are cheated out of their money that we have seen so much of in the last few years. Maybe you didn't notice that.
Another economics question - should derivatives be banned ?
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+1. Unless you are self-employed, otherwise it's tough for your average salaried employee to dodge and minimize tax hit legally.
Not for me.
Having said that, you have to wonder why there are increasing (pale compared to Greece) tax evasion scheme or should I say high motivation and commitment for both individuals and corporations to cheat the tax system and take advantage of the loopholes in Canada and the US.
Could the culprit be the antiquated, opaque and very complicated tax code at IRS and CRA, together with add-on vote buying tax incentives introduced by the politicians of all stripes?
Not suggesting people and corporation would stop treating when the tax code is simple, one flat rate and transparent but I would not be surprised the motivation to cheat will be significantly lower than the current system.
The tax rate is already flat and in more than one way regressive. When you factor in all of the hidden taxes on virtually everything we buy or even basic services used, it takes a far bigger bite out of the less well to do than the rich in terms of their annual income. The strategy of states and municipalities in the last few years has been to nickle and dime people to death and hope they don't notice. Corporations providing what I would call lifeline services; water, power, communications, transportation and the like, do the same damn thing.+1. Unless you are self-employed, otherwise it's tough for your average salaried employee to dodge and minimize tax hit legally.
Not for me.
Having said that, you have to wonder why there are increasing (pale compared to Greece) tax evasion scheme or should I say high motivation and commitment for both individuals and corporations to cheat the tax system and take advantage of the loopholes in Canada and the US.
Could the culprit be the antiquated, opaque and very complicated tax code at IRS and CRA, together with add-on vote buying tax incentives introduced by the politicians of all stripes?
Not suggesting people and corporation would stop treating when the tax code is simple, one flat rate and transparent but I would not be surprised the motivation to cheat will be significantly lower than the current system.
Not sure what you mean "flat". Are you saying the tax rate here are not tiered/progressive?? Could you please show us the proof from CRA or IRS and explain in laymen terms?
Okay that's pretty obvious but other than pointing finger to the corporation to gouge, rip off the average Joes and Janes and fatten their bottom line. Could you please enlighten us whether other additional factors to motivate this?
Hmm....I believe you are one of the "few" who do notice and you probably are savvy enough to figure out the reason behind this. If that's all true, care to share your experience what you did to change this practice? Did you try to persuade forcefully to the unions in the governmental services to cut their entitlements for example?
What's your suggestion then?
Corporate taxes account for 12% of govt revenues
http://www.taxpolicycenter.org/briefing-book/background/numbers/revenue.cfm
Its been deceasing, at the expense of payroll taxes, however, job creation is highly sensative to taxation levels
If you take a ready, shot, aim approach to corporate taxes, a lot of people lose their jobs.
Maybe you didn't notice that.
I discount your arguments because
1. You obviously do not have a deep understanding of what drives an economy nor how catastrophic your desired changes would be
2. You want to change what you do not personally like, Banks & Big Corporations, however you do not understand how vital they are for entire economic system
3. You greatly overstate the probability of social revolt here in NA. We (all Canadians) have it pretty good.
Social revolt will not be tolerated if it starts to affect the economy
4. Your theories are based upon left wing college writings and propaganda and I suspect limited real world experience.
5. You do not like the 80 / 20 split of wealth, since you are in the 80. Why not strive to join the 20, rather than change the rules of the game.
Simply because you are pushing on a string and will not obtain the changes you want
6. Every commie since Lenin has thought they could achieve a balance between incentive and spreading the wealth. Everyone of them would up with a economic disaster and had to use brutally repressive measures to snuff out the natural desire to want more for ones family.
If you alter the incentive to get rich you will royally fuck up the economy and society
And in the 1950's it was nearly 30%. Somebody has to make up for the gap in revenue. Ask yourself who is likely being screwed here. Or maybe you think we were a commie country back then.
“Who” is a really good question and not straightforward. The thing about the corporate tax is that there is no Mr. General Motors (as an example) that bares the burden of the corporate tax. Only a real person can bare the burden of a tax. The burden of the corporate tax is passed on to someone else. It could be passed backward to suppliers of factors of production (e.g. workers who supply labour and shareholders who supply capital) or forward to customers. I strongly suspect that the main reason the corporate tax exists is simply that all these groups think someone else bare the burden of the tax (years ago, I came across a paper that surveyed the parties involved and found this). Anyway, the main question with regard to the corporate tax is why you don’t tax the people you want to bare the burden of the tax directly. The only real argument I have ever heard in favour of the corporate tax is that the shareholders of corporations benefit from limited liability which owners of other businesses don’t benefit from. However, this assumes the cost of the tax is passed back to shareholders. Even if this is true, why not just tax income from corporations at a higher rate than income from unincorporated firms? This would really allow it to become a progressive tax if that is what you want (there is no reason to assume shareholders of large corporations are wealthier than the shareholders of small corporations but if you tax people’s income from corporations directly, you would get around this problem).
Anyway, because of issues like this, it is not clear to me why people care so much about corporate taxes.
B
burt-oh-my!
Well, it's clear to me. Corporate tax rates are in fact very very important. They effect levels of investment, entrepreneurial activity, the size of the underground economy, economic growth rates, and capital formation.
From: The Effect of Corporate Taxes on Investment and Entrepreneurship, co-authored by Andrei Shleifer, Department of Economics, Harvard University
"We present new data on effective corporate income tax rates in 85 countries in 2004. The data come from a survey, conducted jointly with PricewaterhouseCoopers, of all taxes imposed on "the same" standardized mid-size domestic firm. In a cross-section of countries, our estimates of the effective corporate tax rate have a large adverse impact on aggregate investment, FDI, and entrepreneurial activity. For example, a 10 percent increase in the effective corporate tax rate reduces aggregate investment to GDP ratio by 2 percentage points. Corporate tax rates are also negatively correlated with growth, and positively correlated with the size of the informal economy. The results are robust to the inclusion of controls for other tax rates, quality of tax administration, security of property rights, level of economic development, regulation, inflation, and openness to trade."
From: The Effect of Corporate Taxes on Investment and Entrepreneurship, co-authored by Andrei Shleifer, Department of Economics, Harvard University
"We present new data on effective corporate income tax rates in 85 countries in 2004. The data come from a survey, conducted jointly with PricewaterhouseCoopers, of all taxes imposed on "the same" standardized mid-size domestic firm. In a cross-section of countries, our estimates of the effective corporate tax rate have a large adverse impact on aggregate investment, FDI, and entrepreneurial activity. For example, a 10 percent increase in the effective corporate tax rate reduces aggregate investment to GDP ratio by 2 percentage points. Corporate tax rates are also negatively correlated with growth, and positively correlated with the size of the informal economy. The results are robust to the inclusion of controls for other tax rates, quality of tax administration, security of property rights, level of economic development, regulation, inflation, and openness to trade."
I can see the validity in your beliefs and have thought of them, they may be right I remain unsure because of my naivety but I will say that a true Marxist wants complete overthrow of capitalism because of the reasons you stated which is capitalistic reform will not work
And yes, complete social revolt will be oppressed by our government even if it means machine gunning the masses which is why true Marxists understand the term "armed struggle" as the ruling class will not allow democracy to win if the vote is for their removal
I am curious, do you beleive that the state of capitalism can become so impoverished that such a rebellion is possible ???
Is not a deep depression still possible because capitalism does mean the law of the jungle
You have no need to fear Marxism spreading as long as the working class has enough to get by no matter how rich the ruling class gets but what if there is a deep depression for an extended period of many years? Will not the poor starving majority rebel against the super rich minority that caused the depression ??? Will the ruling class go back to the tried and true of starting a war to control the peasants ?
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